Achieving Your Organizational Goals with Strategic HR
Historically, Human Resources was (and sometimes still is) regarded as a back-office function, rather than a strategic one. And in the case of many small and mid-sized businesses, the C-suite defines strategy, and then HR is called upon to help execute.
But you see a very different picture in large companies. The overwhelming majority of Fortune 500 companies have a Chief Human Resources Officer on the board, and those CHROs play a key role in shaping all aspects of organizational strategy.
You don’t have to be a Fortune 500 company to take advantage of strategic HR. All you need is the right team with the right focus. In this guide, we’ll take a look at how your HR team can make a strategic impact on your business goals.
- How does HR play a role in organizational strategy?
- How strategic HR creates an environment for success
- How strategic HR shapes organizational strategy
- How strategic HR can deliver organizational goals
- Building a strategic HR team
How does HR play a role in organizational strategy?
Why do some people overlook the strategic importance of HR? Often, it's because they don't fully understand what HR does. If you ask someone from outside the department to describe the role of HR, they'll talk about things like hiring, payroll, and resolving disputes.
Those are all employee-facing HR tasks. But human capital experts also perform many vital tasks that keep your company’s engine humming.
HR work is incredibly diverse, dynamic and challenging, but the impact of HR initiatives can help move the needle drastically. You can roughly categorize the department's responsibilities into three main areas of focus:
- People: HR is responsible for each person's employee experience, from recruitment and onboarding, to engagement and professional development. This type of work includes identifying the skills and talent needed for today and in the future, defining job roles and how to accomplish individual, departmental and organizational goals, and developing people through defined career paths and learning opportunities.
- Processes: HR oversees the procedures and systems that govern day-to-day life in the organization. This can mean designing the organizational structure, setting guidelines for how people are paid and rewarded, and leading change management initiatives for large-scale adoption.
- Culture: HR plays a major role in the organization's culture. If the culture isn’t aligned with the company's values and mission, then HR can help connect, inform and influence the type of behaviors and actions needed to cultivate the intended culture and leadership.
Essentially, HR is about creating an environment for success and serving as a strategic business partner across all functions.
For the best results, HR should report directly to the CEO and work alongside the CFO, COO and other executive leaders to make informed decisions and meet business goals and objectives. By collaborating as a leadership team, the HR leader has the opportunity to implement solutions to business challenges and impact positive change.
How strategic HR creates an environment for success
Strategic HR leaders spend much of their time laying the groundwork for long-term success. This involves performing some essential tasks that make the organization more responsive and scalable, such as:
- Gathering and analyzing HR data
- Maintaining a reliable talent pipeline
- Delivering professional development programs
- Overseeing the employee experience
Without these core HR functions, no business could ever execute a major strategy. Let’s take a closer look at what's involved in each.
Gathering and analyzing HR data
Most businesses rely on data to drive their decisions. HR data can offer invaluable insight into all aspects of the business, giving leaders a clear picture of where things are now and where they could be.
Strategic HR departments can provide analysis based on hundreds of data points, including:
- Recruitment data: Information about the time and cost behind each hire, plus applicant rates and onboarding success
- Engagement data: Stats about employee performance and engagement, including survey results, goal tracking, and absenteeism
- Professional development data: Information about training course completion and other development milestones, which can show how employees are growing within the team
- Culture data: Statistics that give a broad overview of the employee experience, including wellness, DE&I, and communication
- Retention data: Data about the volume of and drivers behind staff turnover, including the results of exit interviews
If the HR team is set up correctly, they can provide a data dashboard that allows you to get an at-a-glance understanding of the current state of play.
Maintaining a reliable talent pipeline
Businesses might need to recruit at a moment’s notice, whether it's to replace an outgoing employee, bring in additional skills, or expand the current team. HR’s role is to fine-tune the recruitment process so that you can attract top candidates through your employer brand and nurture a pipeline of available, qualified talent.
To build this talent pipeline, strategic HR leaders need to think about:
- Internal hiring: Building processes to identify and develop internal candidates
- Recruitment process: Creating a smooth and speedy end-to-end process for bringing in new hires
- Job descriptions: Defining the requirements for each role so that you can identify the right candidate
- Offer creation: Creating the right blend of salary, benefits and other rewards to attract the best talent
- Onboarding: Introducing new hires into the organizational culture and giving them the best chance of success
Maintaining a talent pipeline might require help from an expert, such as a Recruitment Process Outsourcing consultant. Strategic HR leaders will look at building those relationships so that you always have access to the expertise you need.
Delivering professional development programs
When an employee learns a new skill, the organization becomes more capable. That's why strategic HR leaders develop professional development plans around the company's goals, ensuring that your team always has the skills they need.
Strategic HR approaches training in a systematic way, with a focus on:
- Skills matrix analysis: Working with leaders to define the organization's skills requirements and then identifying areas where the team needs to improve
- Upskilling: Helping the team members move towards specified goals, such as attaining certification or learning a new technology
- Mentorship: Peer-to-peer knowledge sharing that allows people to learn from their more experienced or knowledgeable colleagues
- Coaching: Working with people to help them improve on their weak points, including soft skills or interpersonal communication
A great training and development program can be a powerful tool, helping your team develop the skills required to meet your long-term goals.
Overseeing the employee experience
An organization can only reach its goals if every team member gives 100%. Unfortunately, that doesn't always happen, as employees can be stymied by personal factors, bad communication, or a toxic culture.
Strategic HR's role is to anticipate and minimize these issues. You achieve this through tasks such as:
- Culture surveys: Getting feedback from team members about their impressions of your organizational culture and gathering their suggestions for improvements
- DE&I: Identifying discrimination or exclusion issues that could impact an employee's sense of belonging and ability to do great work
- Engagement pulse checks: Gathering feedback from employees to find out how they feel about their current role
- Stay interviews: Holding in-depth conversations with employees to learn more about your retention techniques
All of these duties are just some of the strategic elements of HR that help you create an environment for success.
How strategic HR shapes organizational strategy
We're in the grip of a major skills shortage right now, with the number of vacant positions up by over 33%.
This has a big impact on strategic decision-making. Leaders might see an opportunity to grow the business and chase ambitious goals, but they have to pause and ask two vital questions:
- "Do we have the people to deliver these goals?"
- "If not, will we be able to hire the people we need?"
A strategic HR voice can help work through these issues and arrive at optimal, attainable goals. Here are some of the things that a CHRO or Human Capital Manager can do to aid strategic planning:
Manage organizational competencies
Every team has different strengths and weaknesses. A CHRO or other HR leader can help keep track of those abilities so that leaders understand what the team is capable of.
On a strategic level, HR can keep track of:
- Team competencies
- Significant skills gaps
- Where the organization needs to bring in additional people
- Whether the current processes are optimized to make use of team members
Understanding your team’s current competencies and capabilities is an important first step in strategic planning. With this data, you can see if your current team is ready to deliver your goals.
Flag up opportunities and challenges
Strategic HR leaders can also raise awareness of issues that might impact the company’s goals. For example, there's currently a shortage of full-time IT specialists, especially in fields like cybersecurity. If the company’s strategy requires hiring more of these professionals, then it could lead to:
- More hiring, resulting in longer project timescales
- More contractors, resulting in higher costs
Conversely, a strategic HR leader can also point out untapped opportunities within the team. For instance, imagine a company with a dedicated customer support team. The HR leader might know that many of these agents have some sales experience, which means that they have the skills to upsell during service calls. That's the kind of opportunity that could be overlooked without input from HR.
Offer a real insight into culture
Executive leaders don’t always get a chance to spend time on the ground, experiencing day-to-day interactions with clients and team members. Because of that, executives don't always have the best understanding of the organization's true culture, as lived by employees.
HR leaders can help executives understand the culture by presenting analysis and examples. This will help leaders understand important details such as:
- Cultural alignment: There are many different types of organizational culture, and one isn't necessarily better than the others. The question is whether your culture is suited to your goals and strategy, or if you need a cultural realignment.
- Toxicity: Culture can contribute to a negative employee experience through bad practices (which lead to stress and burnout) and poor oversight (which can lead to disputes, conflict and bullying). A toxic culture impairs employees’ ability to meet their targets.
- Subcultures: Companies often break up into smaller subcultures that behave differently from the dominant culture. Again, the main question is whether these subcultures support your mission or hinder it.
Culture can have a detrimental effect on the kind of goals that you pursue. For instance, if you have a dynamic culture focused on learning and collaboration, you can think about goals that involve becoming innovators in your space.
Engage in IT infrastructure development
Technology plays a vital role in almost every corporate strategy. IT offers a chance to streamline and automate, plus it potentially opens up new markets. For example, businesses that traditionally rely on face-to-face client interactions can now do everything over Zoom.
But around 70% of digital transformation projects fail, and one of the biggest causes of failure is user adoption. Organizations run into issues such as:
- Not identifying the right people to champion new IT systems
- Not communicating the benefits of new systems to employees
- Not helping employees understand how to benefit from new systems
Most issues can be tackled through training and good communication, which means that HR is perfectly poised to help out. Strategic HR can also help the organization make IT decisions that best support the existing people, processes and culture.
Maintain consistent policies
When your business sets an ambitious goal, you have to stop and ask, "how does this affect the rest of the organization?” HR can help out by raising important questions about strategy proposals, such as:
- We urgently need to hire specialists and we're willing to pay extra to get them → How does that impact our current salary structure?
- We want to hire out-of-state remote workers→ What are the regulatory compliance issues of hiring out-of-state? Will we adjust salaries to reflect the local cost of living?
- We are expanding into an international market→ Do our people require licenses or certification to operate abroad? If we're hiring non-English speakers, do we have a suitable back-office team to support them?
How Strategic HR can deliver organizational goals
There's a saying in the military: "no battle plan survives contact with the enemy". It's often the same in business, as high-level strategy falls apart in the face of day-to-day reality.
But Strategic HR can help deliver goals by nudging every team in the right direction. Here are a few ways that HR leaders can help execute your company's strategy:
Building an employer brand
Marketing handles your organization's brand relationship with clients. But what about your brand relationship with employees and potential candidates?
Employer branding is one of HR's most important functions and a crucial part of your talent pipeline. As with customer-facing branding, it's about building a long-term relationship with people so that when they find themselves looking for a new job, they think of you.
Employer branding has many strands, including:
- Analysis: You need to consistently monitor brand sentiment to find out what people think of your organization. You can do this by monitoring conversations on social media, or by inviting people to complete a survey.
- Messaging: Brands require a strong value proposition that tells people why this brand is relevant to them. What makes your company an employer of choice? Think about your culture, your Total Rewards, and the opportunities available to employees—and keep an eye on your Glassdoor ranking.
- Communication: Next, you need to communicate that brand to the world. Social media is the best place to do this, but you can also reach out through job fairs, networking events, and other places where you might connect with candidates.
- Optimization: Your ideal candidate will keep evolving, and your employer brand must evolve too. Gather data and adjust accordingly
Communicate vision and values
It's easy to communicate the what, when and how of a new strategy. Team members will understand what the organization hopes to achieve, and they will hopefully understand what they need to do to help reach the goal.
But it's harder to communicate the why of the new strategy, and understanding why is the key to engagement. Why should employees care about your new strategy? How will it improve their lives, or enrich their local community?
This is an area where HR can intervene by:
- Restating the company's vision and values
- Talking about how the new strategy complements those values
- Encouraging people to live and work according to the core values
By focusing on vision and values, you can help people see why their contribution matters. This leads to increased employee engagement and increases your chances of a successful strategy.
Monitor cultural evolution
Any shift in direction can have untold consequences for your organizational culture. For example, if you put a focus on innovation, it will lead to a more collaborative culture. If you focus on sales, the culture will become more competitive.
Companies succeed when their organizational cultures are aligned with their goals. Strategic HR leaders can help by:
- Conducting culture surveys: Use surveys and focus groups to get a clear picture of the current state of the culture.
- Encouraging communication: Culture is all about communication, both manager-employee communication and peer-to-peer. You can support a positive culture by helping your team to become better communicators.
- Stamping out toxicity: Negative behaviors, such as bullying or non-cooperation, can quickly turn your culture toxic. HR can help prevent this by writing and enforcing robust policies.
Culture can't be controlled from above, but you can keep a close eye on what's happening and try to nudge things in the right direction.
Build and deploy new teams
When companies enter a growth phase, they need to build new teams from the ground up. HR plays a vital role here—an activist HR leader can help a new team get up and running in record time.
Some of the key tasks here include:
- Scaling up your talent pipeline: We mentioned the importance of a talent pipeline previously. Ideally, your talent pipeline should be able to cope if there's a sudden spike in demand, like if you need to build a whole new team.
- Creating a dynamic onboarding process: Your onboarding process should be flexible so that you can cope with any circumstances. For example, you might need to onboard new teams in a regional office or onboard remote workers.
- Integrating with organizational culture: A new team can mean a new subculture, especially if the team is stationed outside of your main office. Subcultures aren't necessarily a problem, but you need to ensure that they're aligned with your strategy
- Creating appropriate policies: New teams might require substantial policy reviews. For instance, a team working out of state will need to comply with local regulatory compliance guidelines.
Strategic HR leaders will be thinking about these challenges all the time, even when you’re not actively hiring. And, when it’s time to move the company into a phase of growth, your HR leader will be able to provide the talent you need.
Support adoption of new processes
Any kind of change in direction will require people to change their approach to work. For example, say your company invests in a new IT system that captures more customer data and produces better analytics. This new system will only provide value if your team knows how to use it properly.
HR can ensure a smooth transition by:
- Assess training needs: Work with team members and local leaders to assess training requirements and develop a suitable plan
- Identify skills gaps: Locate areas where the team requires additional skills and might need to hire some fresh talent
- Redesign jobs: Some roles might require changes to the job description. You can work with leaders to help ensure that all roles are correctly aligned with the new process.
- Address concerns: Seek out feedback from employees and tackle any issues that might arise from a new process
HR is about creating an environment for success, and new IT or new processes can be a major change to the environment. Strategic HR gets ahead of transformation and finds ways to create a smooth transition to the new way of doing things.
Change the organizational structure
The org chart is one of the biggest long-term responsibilities of HR. You can see when the organizational structure needs to change in order to support goals – for example, an innovative culture might require a flatter organizational structure where employees can communicate with senior leaders.
Managing the organizational structure takes a lot of effort and direct support from senior leadership. Strategic HR leaders tackle this by:
- Maintaining an org chart: Your org chart should offer a realistic vision of the internal workings of your organization, including lines of communication between various levels of leadership
- Analyzing organizational alignment: HR leaders should keep a close eye on the organizational structure and how it relates to your overall goals. If the company starts to drift away from its optimal organizational structure, a strategic HR leader will flag this problem to the board.
- Proposing structural changes: Executive leadership will support a restructure, but only if they understand why it's happening and how it benefits the organization. HR leaders play a crucial role in creating actionable proposals that benefit everyone.
- Implementing restructures: In the event of a re-org, HR will help to define new job descriptions and facilitate communication. You may also have to hire or upskill to fill new requirements.
Organizational structure is something that evolves over the course of years, especially in larger companies. But HR leaders still need to watch the structure on a day-to-day level and ensure that the organization is always set up to succeed.
Building a strategic HR team
When HR is treated like a back-office function, HR leaders can't do anything to help you execute your broader strategy. But when you include HR as part of your strategic planning team, you'll ensure that you have the people, processes and data you need for success.
That's why it's worth investing in your HR team from the moment your business starts to grow. Need some help with HR strategy? Book a no-obligation consultation call today and speak to a Helios HR expert on how we can help deliver your strategic goals.